The way fashion and retail looked ten years ago is vastly different to how it is now. There is competition from the online sector and which never existed. Online retailers can enter the market with far fewer costs. Store rent has been increasing year on year whilst profits have been reducing. A walk down any high street will show you just how hard this market is to compete in. So many companies have disappeared during this time, stores that were considered British institutions such as Woolworths and BHS. Many more are struggling, the outlook is very bleak for the high street.
One of the more interesting changes we have seen in logistics is a big increase in air freight. Where in the past companies would take a chance on products they felt would be good sellers and bring large quantities via ocean, safe in the knowledge that they had the warehouse space and could always rely on an end of season sale to get rid of any surplus. There has been more of a push into reducing these quantities and being ready to replenish popular products via air freight once they have proved to be good sellers.
Most of the larger stores didn’t like to talk about air freight, we have met with their logistics and buying department and everyone would be excited to talk about ocean volumes, throwing around large quantities of TEU’s that they were moving. Yet if we mentioned air freight the room would fall quiet and someone would usually say “we don’t do air….. well only in emergencies”.
This is where we find the conversation gets very interesting. Because they never wanted to talk about air freight they would generally let the company that handled the sea freight move the air as well. Usually without even looking at the competition, instead getting a quote from the current provider, just to ensure they could sign off the additional cost. Yet this is one of the main areas that we are able to show them a huge saving into their businesses.
Whilst air freight requirements may only be small for your business in terms of SKU’s it is no doubt the most expensive aspect per SKU of your logistics costs. With this in mind it is important to discuss this subject and ensure that you and your logistics partner fully understand the reason for this shipment being air freight in order to work together for the best solution for your company.
At FSC Oceans we look to tailor a bespoke solution around your company’s specific needs as we look to build long term partnerships with our clients.